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With the advent of low-cost airlines, Internet fare specials and easy online booking, many air travelers plan their own trips online without the aid of a professional. But this can lead to difficulty, particularly when traveling to a destination that requires a connection using two different airlines. While two tickets covering each air flight are easily ticketed, some may be surprised upon airport arrival to discover that baggage cannot be checked to the final destination. The two airlines may not have an interline agreement that covers baggage transfers.

Significance

Interline agreements were developed to provide convenience for customers who could only get to their destination via a connection using two different airlines. Agreements cover fares where both carriers agree to publish a fare from the origin to the final destination and then internally divide the revenue between them. The customer would not have to pay two fares based on each carrier's flight and could be issued one ticket with two flight segments. The agreement allows each airline to accept the other's ticket and covers baggage transfers and liability. Often cargo shipments are included in the agreements. Both international and domestic airlines traditionally participate in the agreements. Many low-cost carriers do not participate or have limited agreements.

Passenger Benefits

Passengers benefit from interline agreements from a cost and convenience standpoint. Many small and medium-sized cities feature air service but often only offer flights to a larger hub airport where a connecting flight takes them to the final destination. Fares between the smaller airport and the hub city can be high, but an interline ticket to the final destination is usually considerably cheaper than the sum of the two local fares. Additionally, airlines automatically transfer baggage at the connecting airport. Agreements also cover irregular operations where customers may be transferred to other airlines at no cost. Other irregularities include baggage damage, delay or loss where the customer deals only with the final delivering carrier regardless of which airline was responsible for the irregularity.

Airline Benefits

Airlines benefit from increased revenue. The two airlines may offer a highly competitive joint fare that attracts customers to their particular routing. Long-haul carriers add incremental passengers to their flights. Cash flow also benefits the airline that issues the ticket since ticket revenue for both airlines is collected by the issuing carrier. Internal accounting procedures process tickets via industry clearing houses, and the issuing carrier then pays other airlines for travel over their routes based on the interline prorate agreement. The agreement also simplifies customer claims for baggage irregularities and provides a system for settling claims internally after final customer settlement.

Code Share and Interline Agreements

Code-share agreements focus on scheduling and aircraft sharing. A code-share customer may purchase a ticket on one airline but travel on another airline if the two have agreed to the relationship. Customers seeking travel on airlines with code-share agreements have a greater selection of flights since the ticket can be used on either carrier interchangeably, subject to fare rules and inventory availability. Since tickets are interchangeable, airlines with code share agreements also have an interline agreement. Code share agreements also usually provide frequent-flight bonus program mileage accrual to the customer's program of choice.

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About the Author

Jeff Fulton is a writer specializing in business, travel and culture. He has worked in international sales, customer relations and public relations for major airlines, and has written for Demand Studios since May 2009. Jeff holds a Bachelor of Science in journalism from Northwestern University and a Master of Business Administration in marketing from the University of Chicago.

Leaf Group is a USA TODAY content partner providing general travel information. Its content is produced independently of USA TODAY.

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